Credit checks - what you should know

If you ever apply to a lender or other financial institution to take out one of their products then the chances are they will do a credit check on you. This check is designed to help the lender work out how much of a risk it will be to lend money to you or to give you one of their products. After all, the lender really has no idea whether you can cope financially or whether you will meet your financial obligations to them -- the easiest way for them to assess this is to look at how you`ve managed your finances in the past.

Your credit information is held by various credit checking agencies whose job it is to pull together information about you and your finances. So, for example, they may list if you are registered on the electoral roll, whether you manage your finances (such as mortgages and credit cards) well and whether you have any County Court Judgements (CCJs), overdue payments or bankruptcy proceedings against you.

So, when a financial institution accesses your account they look at some or all of this information and give it a rating based on the criteria for lending that they have. You`ll get positive points for good financial management and negative ones for bad financial management -- the financial institution will add the scores up and -- if they reach a certain number -- will approve your application. If your score falls short then they may well turn your application down.

It is, therefore, important to make sure that you keep your credit record as `clean` as possible. If your credit rating and score is not as good as it might be then you could find it hard to get approval for financial products in the future. So, for example, you could be turned down for credit cards, mortgages and loans if your credit rating is adversely affected. Although if you do have financial problems you can of course apply for specialist products such as a bad credit remortgage.

The easiest way to assess how your credit history will look to a financial institution is to take a look at your credit history. The three main credit agencies (Experian, Equifax and CallCredit) are all legally bound to let you see your credit record for a small fee. Or, if you prefer you can subscribe to a monthly service so you can keep an eye on your credit rating on a regular basis

Mortgages : Cheap Mortgages with a low APR and Bad Credit Mortgages

There is an enormous array of mortgages and re-mortgages available to homebuyers, which means there is almost certain to be a loan that will suit your situation.

Choose a reputable and independent mortgage broker. A broker may charge a flat fee for the arrangement of your mortgage, or they may charge a percentage of the amount you borrow.

The advantage of an independent broker is the ability to sieve through the many unsuitable products until they reach the right one, which means that the amount you pay them could pale into insignificance compared to the amount of money they save you on your mortgage.

Another advantage is that the increased buying power can often mean they can offer favorable deals on loans, perhaps valuation fees waived or a lower rate of interest.

Many brokers and lenders have an internet presence and some offer you the opportunity to apply for mortgages online.